Some insurers plan to lower Obamacare premiums

WASHINGTON — Four of the nine health insurers selling Obamacare plans in Indiana are expecting to cut their average rates next year, according to filings with the Indiana Department of Insurance.

The largest seller of Indiana plans on the federal marketplace — health insurance giant Anthem of Indianapolis — is seeking a small rate increase, 3.8 percent.

Attention focused this month on insurance companies around the country that are seeking double-digit increases in premiums — and two that sell plans in Indiana through HealthCare.gov are proposing to do that.

But four companies are cutting average rates.

"Our actual claims experience has been better than what we thought it was going to be," said Jamie Bruce, chief marketing and business strategy officer for MDwise Marketplace, which is reducing average premiums the most — 19 percent.

Even without the pending Supreme Court challenge to insurance subsidies that could upend the system as early as Monday, insurers are still figuring out how to price plans for the individual market, which was expanded by the Affordable Care Act.

The 2010 law requires most Americans to have insurance or pay a penalty. And it created state marketplaces to facilitate the buying of plans for those not offered coverage through an employer or a government program.

Subsidies are available on the exchanges to those earning up to 400 percent of poverty — which is $63,720 for a two-person family.

But, in one of the most anticipated decisions from the Supreme Court this year, the justices will decide this month whether subsidies are valid in states like Indiana that deferred to the federal government to run their marketplace.

That's because the ACA says subsidies can be offered through a health care exchange "established by the state." But the law also set up HealthCare.gov as a fallback for states that chose not to run their own exchange.

If the subsidies are no longer available in Indiana, healthier people are expected to drop their coverage, increasing costs for insurers — and rates for consumers.

Time Insurance Co., for example, estimates in its filing that the overall health of people buying individual plans "would deteriorate significantly in Indiana as a result of the loss of subsidies." Therefore, if the Supreme Court says subsidies can't be offered in Indiana, the company argues, Indiana regulators should let insurance companies revise their rates.

A spokeswoman for the Indiana Department of Insurance said the agency will have to evaluate the Supreme Court's decision before deciding how to proceed.

"If the ruling results in requested 2016 rates appearing insufficient, then IDOI will indicate such to carriers and they will be expected to re-evaluate their premiums and submit premiums that are adequate with the change in assumption required by the ruling," said spokeswoman Jenifer Groth.

The state is in the process of reviewing proposed rate changes before submitting them to the federal government in August.

At the end of March, 180,529 Hoosiers were enrolled in exchange plans, with 88.5 percent of them receiving a subsidy, according to the U.S. Department of Health and Human Services. The average subsidy was $320 a month.

The average cost of premiums proposed for next year, before subsidies are included, ranges from $378 a month from Celtic Insurance Company, which offers Ambetter plans, to $694 for the Assurant Health plans sold by Time Insurance Company.

Time, which is discontinuing its current plans and will be offering new ones, is one of two companies selling on Indiana's exchange that is seeking more than a 10 percent increase over this year's premiums.

Physicians Health Plan of Northern Indiana, which is seeking a 14.5 percent increase, said in its filing the change is largely attributable to the continued increase in the cost and use of medical services, plus a decrease in the federal assistance to insurers that's helping the market get established, and because their current customers needed more medical care than anticipated when 2015 rates were set.

Critics of the Affordable Care Act have focused on proposed rate increases of more than 10 percent, which had to be publicly disclosed by the federal government this month.

"President Obama promised that premiums would go down because of his law. That has not happened," said Sen. John Barrasso, the Wyoming Republican who chairs the Senate Republican Policy Committee. "These price hikes are taking place across the country, the amounts are staggering, and they affect enormous numbers of hard-working Americans."

But Anthem, which has the largest share of Indiana's individual market, is seeking only a 3.8 percent increase. That's despite the fact the company expects the use and expense of medical services to go up 10 percent.

The rate changes sought are averages, and won't be the same for each plan a company offers in all parts of the state. For example, Anthem's average includes a minimum 2 percent decrease for one of its plans and a maximum 18 percent increase for another.

CareSource Indiana Inc. wants to lower rates an average 5 percent, but premiums for specific plans could go down by as much as 27 percent or up by as much as 20 percent.

MDwise, a nonprofit that had operated Medicaid managed care plans in Indiana but had no experience with commercial plans before the ACA, had to rely on market estimates from others when setting prices for its 2014 and 2015 offerings.

Now, however, MDwise has paid enough claims for its initial customers to have a better sense of what its true costs will be next year.

"Having your own experience obviously gets you better perspective of what the rates need to be," Bruce said.

Another reason the company says it can lower rates is the state's expansion of Medicaid eligibility is moving people who are closest to the poverty line off the private insurance market. That's expected to improve the overall health of those remaining in the individual market, as is the fact that people transitioning off of plans that no longer meet the ACA's minimum requirements are expected to be healthier than those currently on the exchange.

And, after initially offering plans in only 45 counties, MDwise is expanding from the 71 counties where it's now selling plans to all of Indiana's 92 counties next year.

Also expanding is IU Health Plans, which will offer coverage in 45 more counties next year, after starting with 17 this year. That's one reason IU gave for its proposed 16.5 percent cut in rates. IU Health is also trying to keep premiums low to offset the fact that its network of doctors and other health providers is not as broad as others.

"We launched in a few markets (in 2015) to understand what our members wanted and what the claims experience would be," spokeswoman Lauren Cislak said of the rate cut. "Given very early data, we've been able to modify the plan favorably."

The Kaiser Family Foundation, a nonpartisan health research and communication group, recently assessed how insurance companies have fared under the Affordable Care Act and found financial performance is roughly comparable to what it was before the law.

"While some insurers saw unexpectedly high health expenses relative to the premiums they set," researchers wrote earlier this month, "others largely balanced that out with better experience than expected."